SHORT TERM: pullback continues, DOW -58
Overnight the Asian markets lost 0.5%. Europe opened lower and lost 1.9%. US index futures were lower overnight as well. At 8:30 Export (1.0% v +0.5%)/Import (+0.3% v +0.1%) prices were reported higher, and Retail sales were reported higher: +0.5% v +1.3%. The market opened 4 points below yesterday’s SPX 2079 close, bounced to 2081 in the opening minutes, then headed lower. At 10am Business inventories were reported higher: +0.1% v +0.4%. The market declined until it hit SPX 2064 just past 11am. Then it rallied to SPX 2075 by 12:30, before retesting 2064 by 3pm. After that the market rallied into the close, ending the day at SPX 2075.
For the day the SPX/DOW lost 0.25%, and the NDX/NAZ were mixed. Bonds lost 2 ticks, Crude slipped 40 cents, Gold added $1, and the USD was higher. Medium term remains the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: the PPI and NY FED at 8:30, Industrial production at 9:15, then the FOMC statement at 2pm. Today Q2 GDP est. was reported higher: +2.8% v +2.5%.
The market opened lower again today for the fourth day in a row. And for the third day in a row it tried to rally after the open but gradually headed lower. At today’s SPX 2064 low the market had retraced nearly 61.8% of the entire 2026-2121 uptrend. Quite a four day decline after a three week advance. Currently the market is at an interesting juncture. Should the market decline to SPX 2026, it would display three completed trends up from the February 1810 low which could be labeled all of Major wave B. Should the market find support above that level, then rally above SPX 2121, the uptrend would be extending and the market dynamics would be far more positive. Short term support is at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Short term momentum ignored yesterday’s positive divergence, was extremely oversold at the low, then bounced to neutral. Best to your trading!
MEDIUM TERM: uptrend under pressure
LONG TERM: neutral